When Will Liquidia Corporation (NASDAQ:LQDA) Become Profitable?

We feel now is a pretty good time to analyse Liquidia Corporation's (NASDAQ:LQDA) business as it appears the company may be on the cusp of a considerable accomplishment. Liquidia Corporation, a biopharmaceutical company, develops, manufactures, and commercializes various products for unmet patient needs in the United States. The US$1.2b market-cap company posted a loss in its most recent financial year of US$79m and a latest trailing-twelve-month loss of US$119m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Liquidia will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Liquidia

Liquidia is bordering on breakeven, according to the 10 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$57m in 2027. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 57% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Liquidia given that this is a high-level summary, however, keep in mind that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Liquidia is its debt-to-equity ratio of 102%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Liquidia to cover in one brief article, but the key fundamentals for the company can all be found in one place – Liquidia's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Valuation: What is Liquidia worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Liquidia is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Liquidia’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.